Intelligize Report Tackles Challenges of Regulatory Fragmentation

Compliance for thee, but not for me.

That’s one way to characterize the stance of U.S. companies and policymakers versus their EU counterparts. Take the matter of foreign insider disclosures, for instance.

Foreign companies that raise capital in the United States – known as foreign private issuers, or FPIs – have long avoided the insider reporting obligations detailed in section 16(a) of the Securities Exchange Act of 1934. However, federal lawmakers eliminated that exemption when they included the so-called Holding Foreign Insiders Accountable Act in the defense spending bill for the 2026 fiscal year, which President Donald J. Trump signed into law in December. The measure calls for directors and officers of FPIs to abide by the same requirements as insiders at U.S. issuers when it comes to reporting their holdings and transactions involving equity securities of FPIs. (Notably, some informed observers would prefer to see the requirements extended to cover owners who control an equity stake of more than 10% of an FPI.)

Compare that stance on insider reporting with the position of many government officials in the U.S. regarding the European Union’s sustainability rules. In October, a coalition of 16 state attorneys general wrote to executives at major U.S. technology companies such as Microsoft and Google asking them not to comply with the EU’s Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive. They warned that adhering to the EU reporting and due diligence requirements subjected the companies to potential litigation and government enforcement actions in the U.S.

Meanwhile, amid a regulatory crackdown in the EU on the technology sector, the White House is using threats of retaliatory trade policies to pressure EU member states to pull back on enforcement against U.S. companies. According to the Office of the U.S. Trade Representative, U.S. service providers operating in the EU have been subjected to “discriminatory” actions, such as lawsuits and fines. Bear in mind that representatives of the EU and U.S. negotiated a deal in August intended to minimize constraints on trade and regulatory burden resulting from the CSRD and CSDDD. Additionally, the U.S. has joined Qatar in using trade and energy policy as leverage points to push the EU to scale back the CSDDD.

That’s the paradox. While the U.S. opposes EU sustainability rules, which include burdensome climate disclosure rules, it makes no bones about wanting more transparency in financial reporting from foreign insiders. A new Intelligize report released today touches on the push and pull between different climate disclosure regimes.

The report, Divergent Rules: Climate Disclosure in a Fragmenting Regulatory Landscape, highlights a key compliance reality for public companies: Even though climate disclosure obligations are getting scaled back at the federal level, they’re growing more complicated globally. Not to mention, U.S. companies also must comply with regulations in states such as California. As a result, issuers are increasingly navigating a patchwork of complex (and sometimes overlapping) requirements.

The fragmentation is creating new risks for U.S. companies. Intelligize’s benchmarking shows increased risk factor disclosures relating to the EU’s new climate disclosure rules. In other words, EU regulators are expanding their role as U.S. requirements evolve.

Read Intelligize’s new report for more on the diverging paths of climate disclosure regimes and how companies are responding to related risks.

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